1 00:00:00,080 --> 00:00:12,640 Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast and I'm Tom 2 00:00:12,720 --> 00:00:15,720 Speaker 1: Keene Jay Ley. We bring you insight from the best 3 00:00:15,800 --> 00:00:21,240 Speaker 1: in economics, finance, investment, and international relations. Find Bloomberg Surveillance 4 00:00:21,280 --> 00:00:25,720 Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course 5 00:00:26,079 --> 00:00:28,120 Speaker 1: on the Bloomberg. Yeah. I don't want to oversaw it. 6 00:00:28,120 --> 00:00:29,640 Speaker 1: I don't know when Mr Laidler is going to say 7 00:00:29,640 --> 00:00:31,440 Speaker 1: here in a moment, but John, I looked at the 8 00:00:31,520 --> 00:00:34,559 Speaker 1: pull back, if you will, that we're seeing in the market, 9 00:00:34,640 --> 00:00:37,239 Speaker 1: and it only gets you at wors is like the 10 00:00:37,320 --> 00:00:41,960 Speaker 1: nastack on to a centered tendency of the recent volatility. 11 00:00:42,200 --> 00:00:44,280 Speaker 1: There's not a lot of gloom and doom on the tape. 12 00:00:44,320 --> 00:00:48,280 Speaker 1: It's just sort of range bound center tendency. Off this morning, 13 00:00:49,320 --> 00:00:51,000 Speaker 1: we know what Ben's going to say. He's going to 14 00:00:51,040 --> 00:00:54,440 Speaker 1: say by but he's going to say bicyclicals. Let's bring 15 00:00:54,440 --> 00:00:57,160 Speaker 1: it him right now, Ben Laidla Sama Hudson Research, see 16 00:00:57,240 --> 00:00:59,640 Speaker 1: a bank right to have you with us? Uh. That 17 00:00:59,760 --> 00:01:02,360 Speaker 1: is a change. Then later and it's not just about 18 00:01:02,360 --> 00:01:08,360 Speaker 1: buying growth equities getting into some cyclicality. Why Ben, Because 19 00:01:08,360 --> 00:01:11,399 Speaker 1: I think I think the election has held well back. 20 00:01:11,440 --> 00:01:14,319 Speaker 1: I think all this talk are we gonna getus or 21 00:01:14,319 --> 00:01:18,920 Speaker 1: not has just been a huge distractions has helped people back. Um, 22 00:01:18,959 --> 00:01:20,679 Speaker 1: you know we're waiting for a vaccine. We don't have 23 00:01:20,720 --> 00:01:22,640 Speaker 1: that yet. I think, you know, roll forward, let's get 24 00:01:22,640 --> 00:01:24,120 Speaker 1: the election out of the way. That's got a bit 25 00:01:24,160 --> 00:01:26,679 Speaker 1: of certainty there, and then let's look forward and what 26 00:01:26,720 --> 00:01:29,560 Speaker 1: does that look like. One you're gonna get three to 27 00:01:29,640 --> 00:01:32,920 Speaker 1: four percent GDP grow, if you're gonna get earnings, and 28 00:01:32,959 --> 00:01:36,160 Speaker 1: you're gonna a mountain more than that off these sort 29 00:01:36,160 --> 00:01:40,880 Speaker 1: of deep cyclical stops people until very recently basically being ignored. 30 00:01:41,000 --> 00:01:42,800 Speaker 1: And I think those are the sort of the big 31 00:01:42,840 --> 00:01:46,360 Speaker 1: beneficiaries of um, you know, the vaccine, which we're going 32 00:01:46,400 --> 00:01:49,040 Speaker 1: to get something some more fiscal stimulus. I think we're 33 00:01:49,040 --> 00:01:51,920 Speaker 1: gonna at something, um, you know, Biden winds and it's 34 00:01:51,920 --> 00:01:53,920 Speaker 1: a blue wave you know, obviously gonna get a lot 35 00:01:53,960 --> 00:01:56,600 Speaker 1: more than that. I think these are the sectors of 36 00:01:56,640 --> 00:01:58,520 Speaker 1: the market which are cheap, which are out of favorite, 37 00:01:58,560 --> 00:02:01,440 Speaker 1: and have just huge operation in lee bridge to this 38 00:02:01,520 --> 00:02:03,600 Speaker 1: sort of base case scenario that I have from here, 39 00:02:03,600 --> 00:02:06,320 Speaker 1: and it hasn't really moved yet because I think people 40 00:02:06,320 --> 00:02:10,360 Speaker 1: have been very distracted by you know, by by this 41 00:02:10,400 --> 00:02:12,519 Speaker 1: fiscal well of talk in the election and everything else. 42 00:02:12,880 --> 00:02:15,440 Speaker 1: Then the challenge of people trying to catch up with 43 00:02:15,520 --> 00:02:19,640 Speaker 1: Ben Laidler is on an absolute or relative basis, do 44 00:02:19,760 --> 00:02:23,600 Speaker 1: you shift, do you shift away from big tech and 45 00:02:23,760 --> 00:02:28,560 Speaker 1: tech completely, or do you do both together and still 46 00:02:28,560 --> 00:02:33,480 Speaker 1: own both areas? Yeah, I mean I think you you know, 47 00:02:33,520 --> 00:02:36,000 Speaker 1: you bring down those sort of quality growth sort of 48 00:02:36,040 --> 00:02:38,320 Speaker 1: big tech healthcare a bit. But you know, I think 49 00:02:38,320 --> 00:02:41,079 Speaker 1: that we're talking different instruments here. I mean I think 50 00:02:41,080 --> 00:02:43,400 Speaker 1: that I think the tech is just a vac story. 51 00:02:43,720 --> 00:02:45,520 Speaker 1: You know, it's with a long time. It's going to 52 00:02:45,600 --> 00:02:47,880 Speaker 1: continue to look very good with these bound sheeets, with 53 00:02:47,919 --> 00:02:51,079 Speaker 1: the structural growth outlook. But absolutely, I mean it's it's 54 00:02:51,080 --> 00:02:54,200 Speaker 1: where everybody now there needs to be a ship. But 55 00:02:54,280 --> 00:02:56,120 Speaker 1: you know, the seconds I'm asking, I'm telling people to 56 00:02:56,160 --> 00:02:59,120 Speaker 1: shift into you know, industrial, stalk out real estate. I 57 00:02:59,120 --> 00:03:01,480 Speaker 1: mean these are pretty small sectors. Um, you know, a 58 00:03:01,520 --> 00:03:02,919 Speaker 1: little bit of money is going to go a very 59 00:03:02,960 --> 00:03:04,760 Speaker 1: long way, and I think you're gonna get an awful 60 00:03:04,760 --> 00:03:07,160 Speaker 1: lot of bang for your buck just because I mean 61 00:03:07,280 --> 00:03:09,000 Speaker 1: just look at what's going on in third quarter earnings 62 00:03:09,080 --> 00:03:10,720 Speaker 1: right now, which we're all sort of ignoring because there's 63 00:03:10,720 --> 00:03:15,200 Speaker 1: a lot else going on. Um, you know, these cyclical sectors, industrials, energy, 64 00:03:15,720 --> 00:03:19,000 Speaker 1: You have beaten expectations by over a dent so far. 65 00:03:19,080 --> 00:03:21,680 Speaker 1: I mean, you're just getting huge leverage on the upside. 66 00:03:22,120 --> 00:03:24,640 Speaker 1: There is, of course, the counter argument that the pandemic 67 00:03:24,800 --> 00:03:27,680 Speaker 1: is accelerating and worsening dramatically in Europe and in places 68 00:03:27,720 --> 00:03:29,920 Speaker 1: in the United States with a record number of cases, 69 00:03:30,360 --> 00:03:32,080 Speaker 1: and that we're not out of the woods. Even if 70 00:03:32,080 --> 00:03:33,519 Speaker 1: we get a vaccine, the rule out is going to 71 00:03:33,560 --> 00:03:37,760 Speaker 1: be complicated, The efficacy is questionable. So how long can 72 00:03:37,800 --> 00:03:41,400 Speaker 1: we stay in this environment with a pandemic still very 73 00:03:41,480 --> 00:03:44,440 Speaker 1: much present and pushing people away from the public realm? 74 00:03:44,760 --> 00:03:46,280 Speaker 1: How long does that have to go on before you 75 00:03:46,360 --> 00:03:50,440 Speaker 1: change your view? Yeah, I mean I think that the 76 00:03:50,480 --> 00:03:52,920 Speaker 1: relative surprise and the which is certainly given me, you know, 77 00:03:53,160 --> 00:03:55,200 Speaker 1: a lot of a lot of hope has really just 78 00:03:55,240 --> 00:03:58,280 Speaker 1: been the resilience of of the of the consumer, the 79 00:03:58,320 --> 00:04:00,800 Speaker 1: resilience of the economic activity. I mean, just at a 80 00:04:00,880 --> 00:04:03,800 Speaker 1: U s p M I for October last week at 81 00:04:03,840 --> 00:04:07,080 Speaker 1: fifty five, I mean, very expansionary, you know, savings right, 82 00:04:07,120 --> 00:04:09,640 Speaker 1: sort of retail sales are sort of back to pre 83 00:04:09,840 --> 00:04:12,520 Speaker 1: sort of pandemic levels. I mean, we're in pretty good 84 00:04:12,560 --> 00:04:15,200 Speaker 1: shape here. I mean I'm not naive enough to think 85 00:04:15,240 --> 00:04:19,000 Speaker 1: that you know this, uh you know, this can go 86 00:04:19,000 --> 00:04:20,880 Speaker 1: on forever. But I think, you know, the story so 87 00:04:20,960 --> 00:04:23,640 Speaker 1: far has been one of just extreme resilience, and I 88 00:04:23,680 --> 00:04:25,839 Speaker 1: certainly think that can go forward a little bit further. 89 00:04:26,040 --> 00:04:27,719 Speaker 1: I mean, at some point, you know, we do need 90 00:04:28,240 --> 00:04:30,120 Speaker 1: we do need some more physical stimulus. And and I 91 00:04:30,120 --> 00:04:32,520 Speaker 1: think we're seeing, you know, everywhere that this second wave 92 00:04:32,680 --> 00:04:35,720 Speaker 1: is uh you know, is having less deaths and less 93 00:04:35,720 --> 00:04:39,000 Speaker 1: impact on economic activity. But but your points well taken, 94 00:04:39,000 --> 00:04:40,520 Speaker 1: I mean obviously can't go on forever. I mean, I 95 00:04:40,560 --> 00:04:42,120 Speaker 1: am looking for a vaccine. I am looking for some 96 00:04:42,120 --> 00:04:44,360 Speaker 1: more physical stimulus, and I am looking for this sort 97 00:04:44,360 --> 00:04:46,840 Speaker 1: of second wave to have less of an impact than, 98 00:04:47,000 --> 00:04:51,040 Speaker 1: certainly than the first wave did. Equity features, as Ben speaks, 99 00:04:51,080 --> 00:04:53,359 Speaker 1: ticking higher still negative, I hate tense. If one per 100 00:04:53,400 --> 00:04:55,360 Speaker 1: cent on the SMP five hundred, Ben, just to wrap 101 00:04:55,400 --> 00:04:59,200 Speaker 1: this conversation up, the correlation between cases increasing in the 102 00:04:59,279 --> 00:05:02,600 Speaker 1: United States and what you think happens with consumer engagement. 103 00:05:02,839 --> 00:05:07,400 Speaker 1: How loose or tight will that be? UM? I think, well, 104 00:05:07,760 --> 00:05:09,880 Speaker 1: my previous point, I think that's a lot looser than 105 00:05:09,920 --> 00:05:11,800 Speaker 1: it was previously. I mean, I think, you know, we've 106 00:05:11,839 --> 00:05:14,240 Speaker 1: just learned to live with this to a certain degree. Um, 107 00:05:14,480 --> 00:05:16,800 Speaker 1: those that have jobs, which clearly is not you know, 108 00:05:16,839 --> 00:05:18,680 Speaker 1: it's not everybody, but those that do have a lot 109 00:05:18,680 --> 00:05:22,400 Speaker 1: more money in their pocket than than they have done historically. 110 00:05:23,040 --> 00:05:25,560 Speaker 1: So so again, you know, I think the consumer is 111 00:05:25,600 --> 00:05:27,520 Speaker 1: going to be pretty resilient. Here's certainly for the next 112 00:05:27,520 --> 00:05:29,360 Speaker 1: couple of months. I mean, at some point we are 113 00:05:29,360 --> 00:05:31,200 Speaker 1: going to need we are going to need more stimulus. 114 00:05:31,240 --> 00:05:33,120 Speaker 1: We are going to need these sort of cases to 115 00:05:33,160 --> 00:05:36,280 Speaker 1: come down. But I think what we've seen so far 116 00:05:36,440 --> 00:05:37,640 Speaker 1: is that, you know, we have a little bit of 117 00:05:37,640 --> 00:05:42,240 Speaker 1: time here. Been great to catch up. As always staying bullish. 118 00:05:42,320 --> 00:05:49,599 Speaker 1: Ben Later of Twahudson Research, Our next guest is really 119 00:05:49,640 --> 00:05:53,120 Speaker 1: good look identifying when you come out of those ranges, 120 00:05:53,200 --> 00:05:56,440 Speaker 1: and we haven't. We can bring Mike Swelling now, please 121 00:05:56,520 --> 00:05:59,400 Speaker 1: bring the head a global fixed income portfolio management might 122 00:05:59,440 --> 00:06:01,320 Speaker 1: greater to catch out with the SA I'm sure you've 123 00:06:01,320 --> 00:06:02,839 Speaker 1: had a part of that. Can we just start with 124 00:06:02,880 --> 00:06:04,880 Speaker 1: this ten year treasury range have been stuck in for 125 00:06:05,279 --> 00:06:07,919 Speaker 1: a number of months now between fifty basis points and 126 00:06:08,360 --> 00:06:10,800 Speaker 1: ninety five at a high end in early June. Might 127 00:06:10,920 --> 00:06:12,400 Speaker 1: you think you've got the set up in front of 128 00:06:12,440 --> 00:06:16,440 Speaker 1: us to break out of that, Sure, Jonathan, I don't 129 00:06:16,480 --> 00:06:18,640 Speaker 1: think I can match last week's piano in my office 130 00:06:18,680 --> 00:06:20,279 Speaker 1: is not large enough per piano, but like a play 131 00:06:20,520 --> 00:06:25,440 Speaker 1: because if that makes your week um. In terms of 132 00:06:25,480 --> 00:06:29,280 Speaker 1: the range on the bond market, I think that the 133 00:06:29,800 --> 00:06:32,160 Speaker 1: death of the bond market rally has been just that 134 00:06:32,279 --> 00:06:35,800 Speaker 1: story has been written way too many times. They're still 135 00:06:36,080 --> 00:06:40,800 Speaker 1: they're still yield, They're still balanced in fix income relative 136 00:06:40,839 --> 00:06:42,880 Speaker 1: to equities and other risk assets. And as long as 137 00:06:42,920 --> 00:06:46,120 Speaker 1: you have investors that are long risk assets and need 138 00:06:46,480 --> 00:06:49,000 Speaker 1: some level of diversification, as long as rates are zero 139 00:06:49,120 --> 00:06:52,840 Speaker 1: negative almost everywhere in the world, the tenure Treasury at 140 00:06:52,839 --> 00:06:56,680 Speaker 1: eighty basis points offers number one, balance for your portfolio 141 00:06:56,720 --> 00:06:59,720 Speaker 1: and some hash efficacy. And secondly, there is yield in 142 00:06:59,720 --> 00:07:02,080 Speaker 1: the thick thincome market. An eighty basis point may not 143 00:07:02,160 --> 00:07:04,679 Speaker 1: sound like a lot, but if it rallies to thirty, 144 00:07:05,080 --> 00:07:08,320 Speaker 1: that's a significant, significant total return. So I think that 145 00:07:08,680 --> 00:07:11,200 Speaker 1: people are writing off the bottom market too early, and 146 00:07:11,240 --> 00:07:13,120 Speaker 1: I think that right now with the tenure at eighty 147 00:07:13,120 --> 00:07:15,480 Speaker 1: basis points, there is value there with a bit on 148 00:07:15,560 --> 00:07:17,760 Speaker 1: hold for the pursuable future, and that's right where I 149 00:07:17,800 --> 00:07:21,320 Speaker 1: wanted to go is within the internals of the market. 150 00:07:21,360 --> 00:07:23,280 Speaker 1: We do that in the equity market all the time. 151 00:07:23,720 --> 00:07:27,360 Speaker 1: What do you see on your desks of the appetite 152 00:07:27,480 --> 00:07:29,480 Speaker 1: and the bid ask. I mean, there's a lot of 153 00:07:29,480 --> 00:07:31,920 Speaker 1: money out there, I get that, But what are the 154 00:07:31,960 --> 00:07:35,800 Speaker 1: internals you see in that bid that demand for fixed 155 00:07:35,800 --> 00:07:41,520 Speaker 1: income paper? So we'll see a lot of the fixed 156 00:07:41,560 --> 00:07:45,840 Speaker 1: income universe way overweight duration or way overweight treasuries. What 157 00:07:45,960 --> 00:07:47,680 Speaker 1: we look at is we look at a lot of 158 00:07:47,680 --> 00:07:49,960 Speaker 1: the funds that are out there and to see how 159 00:07:50,040 --> 00:07:53,080 Speaker 1: much where they stand relative to the benchmark. And you're 160 00:07:53,080 --> 00:07:57,440 Speaker 1: seeing investors right now anywhere between flat and somewhat short duration. 161 00:07:57,560 --> 00:08:01,760 Speaker 1: So that from a technical standpoint is a very positive 162 00:08:01,760 --> 00:08:05,080 Speaker 1: technical for for the bottom market. I would say that 163 00:08:05,120 --> 00:08:08,000 Speaker 1: the other very very important point is kind of the 164 00:08:08,440 --> 00:08:11,000 Speaker 1: volatility that we're seeing now in equity markets and that 165 00:08:11,040 --> 00:08:14,120 Speaker 1: we're likely to see going into your end. It's likely 166 00:08:14,160 --> 00:08:17,640 Speaker 1: to have a positive impact on the treasury market as 167 00:08:17,680 --> 00:08:20,200 Speaker 1: investors look for flight to quality, and a near term 168 00:08:20,200 --> 00:08:23,280 Speaker 1: it may even have a positive u uh tail wind 169 00:08:23,320 --> 00:08:25,559 Speaker 1: towards the dollar as well as the flight to quality 170 00:08:25,640 --> 00:08:28,000 Speaker 1: currency Here's what I'm struggling with, Mike. You say that 171 00:08:28,000 --> 00:08:30,800 Speaker 1: there is probably going to be buying of treasuries, and 172 00:08:30,880 --> 00:08:32,920 Speaker 1: you know, I was reading your notes and your bullish 173 00:08:32,920 --> 00:08:36,200 Speaker 1: on high yield, your bush on the riskiest credit. Isn't 174 00:08:36,200 --> 00:08:38,160 Speaker 1: there a contradiction here that if people are looking for 175 00:08:38,160 --> 00:08:42,280 Speaker 1: the safety of treasuries at sub one yields, why would 176 00:08:42,280 --> 00:08:43,960 Speaker 1: they be confident that they're going to get any of 177 00:08:43,960 --> 00:08:49,640 Speaker 1: their money back with a high yield bond. Well, first off, um, 178 00:08:49,840 --> 00:08:54,240 Speaker 1: there is a lot of merit to owning growth related 179 00:08:54,240 --> 00:08:57,000 Speaker 1: assets and things like high yield that are have not 180 00:08:57,200 --> 00:09:00,600 Speaker 1: benefited as much from the FED coming in buying everything 181 00:09:00,640 --> 00:09:03,600 Speaker 1: in the investment grade universe, buying treasuries and buying mortgages. 182 00:09:03,880 --> 00:09:05,439 Speaker 1: They've kind of been left out there, and there's still 183 00:09:05,480 --> 00:09:10,599 Speaker 1: a decent amount of yield in the hospital market. The 184 00:09:10,640 --> 00:09:16,079 Speaker 1: benefit of treasuries paired with credit is very, very significant. 185 00:09:16,280 --> 00:09:19,640 Speaker 1: When you go long duration paired with credit, you actually 186 00:09:19,640 --> 00:09:22,320 Speaker 1: create better balance in a portfolios. So the event that 187 00:09:22,360 --> 00:09:25,360 Speaker 1: there is a risk off, actually treasuries would rally, and 188 00:09:25,400 --> 00:09:28,000 Speaker 1: then the event that there is a improvement in growth 189 00:09:28,000 --> 00:09:30,600 Speaker 1: and treasuries made back up, you would see credit spreads 190 00:09:30,600 --> 00:09:33,760 Speaker 1: tighten very significantly. So number one, I don't think that 191 00:09:33,760 --> 00:09:37,560 Speaker 1: that's an inconsistency. Secondly, I think that when you invest 192 00:09:37,600 --> 00:09:40,440 Speaker 1: in things like high yield and other fixt income related 193 00:09:40,480 --> 00:09:42,840 Speaker 1: assets that are not treasuries or agency mortgages that are 194 00:09:42,920 --> 00:09:45,600 Speaker 1: very liquids, you think longer term and longer term, we 195 00:09:45,640 --> 00:09:48,920 Speaker 1: do believe that you're gonna have um improvements in care 196 00:09:49,000 --> 00:09:51,920 Speaker 1: for COVID, We're gonna get back to better growth next year, 197 00:09:52,160 --> 00:09:53,960 Speaker 1: and so as a result, you want to stay long 198 00:09:54,000 --> 00:09:56,720 Speaker 1: growth related assets. But as we look at what's setting 199 00:09:56,800 --> 00:09:59,760 Speaker 1: up right now in terms of the potential for election volatility, 200 00:10:00,120 --> 00:10:02,480 Speaker 1: the potential for funding issues at the end of the year, 201 00:10:02,480 --> 00:10:04,920 Speaker 1: as banks are not in a great capital position to 202 00:10:05,000 --> 00:10:06,840 Speaker 1: be able to provide a lot of liquid into markets, 203 00:10:07,040 --> 00:10:09,040 Speaker 1: we actually want to be in a position where we 204 00:10:09,080 --> 00:10:11,400 Speaker 1: have a little duration going into that. But you're also 205 00:10:11,400 --> 00:10:13,199 Speaker 1: in a position where you have dry powder and take 206 00:10:13,240 --> 00:10:16,120 Speaker 1: advantage of this location coming into at the end of 207 00:10:16,120 --> 00:10:18,080 Speaker 1: the year. Hold on a second, let's unpack some of 208 00:10:18,080 --> 00:10:19,880 Speaker 1: that you said dislocation into the end of the year. 209 00:10:19,920 --> 00:10:22,559 Speaker 1: In other words, you're expecting some of the riskier credit 210 00:10:22,600 --> 00:10:27,040 Speaker 1: to potentially sell off and potentially significantly heading into your end, 211 00:10:27,040 --> 00:10:28,959 Speaker 1: and then you're gonna be buying what's your entry point. 212 00:10:29,920 --> 00:10:34,600 Speaker 1: So I'm trying to divide the fixing com universe into two. 213 00:10:35,040 --> 00:10:38,360 Speaker 1: One is the credit related assets, where you're relying upon 214 00:10:39,120 --> 00:10:42,480 Speaker 1: growth improving next year, earning is improving on the margin 215 00:10:42,600 --> 00:10:46,280 Speaker 1: and just getting paid back. And in trading credit, it's 216 00:10:46,400 --> 00:10:49,000 Speaker 1: very hard to jump in and jump out pre election, 217 00:10:49,120 --> 00:10:52,079 Speaker 1: post election going into your end. So long term, we 218 00:10:52,200 --> 00:10:55,480 Speaker 1: still very much like owning credit. In the very mere term, though, 219 00:10:55,679 --> 00:10:58,480 Speaker 1: we look at factors like volatility, and so we look 220 00:10:58,480 --> 00:11:00,400 Speaker 1: at we look at vis we look at bit offer 221 00:11:00,440 --> 00:11:03,040 Speaker 1: spread as Tom was talking about earlier, and we get 222 00:11:03,040 --> 00:11:06,160 Speaker 1: a little concerned that there's gonna be bolatility going to 223 00:11:06,200 --> 00:11:08,679 Speaker 1: the election, and it's likely to be baltilly going to 224 00:11:08,800 --> 00:11:11,120 Speaker 1: your funding stamp on. So what we've done is instead 225 00:11:11,120 --> 00:11:14,160 Speaker 1: of reducing positions in credit related assets which are going 226 00:11:14,200 --> 00:11:16,920 Speaker 1: to be dependent upon growth and longer term, we're trying 227 00:11:16,920 --> 00:11:19,400 Speaker 1: to free up balance sheet and portfolios to be in 228 00:11:19,400 --> 00:11:21,800 Speaker 1: a position to take a match just location, and that 229 00:11:21,880 --> 00:11:25,040 Speaker 1: may be even things that basic at um cash futures 230 00:11:25,040 --> 00:11:27,320 Speaker 1: basis in the treasury market, something that blew up during 231 00:11:27,320 --> 00:11:29,959 Speaker 1: the COVID crisis, blew up in previous funding crisis where 232 00:11:30,000 --> 00:11:32,360 Speaker 1: you can earn very very attractive a term by deploying 233 00:11:32,400 --> 00:11:35,240 Speaker 1: your on your balunt on radio and television. This morning 234 00:11:35,240 --> 00:11:38,040 Speaker 1: our simulcast Michael Swell with us with Goldman Sex out 235 00:11:38,040 --> 00:11:41,560 Speaker 1: of Brandis and LS a few years back. Mike Swell 236 00:11:42,080 --> 00:11:44,440 Speaker 1: right now at LESA and I know with John Farrow's 237 00:11:44,440 --> 00:11:48,440 Speaker 1: interview after interview, everybody says they're buying China debt. All 238 00:11:48,480 --> 00:11:51,960 Speaker 1: my radars up just because everybody seems to be in 239 00:11:52,000 --> 00:11:55,440 Speaker 1: the trade. What's the risk or what's the thought you 240 00:11:55,559 --> 00:11:58,840 Speaker 1: have on what could be out there in two thousand 241 00:12:00,559 --> 00:12:05,440 Speaker 1: for the certitude of owning China debt? Well, I think 242 00:12:05,440 --> 00:12:10,800 Speaker 1: we have two factors that are risk to owning Chinese debt. 243 00:12:10,960 --> 00:12:14,520 Speaker 1: One is the risk that growth and that the Chinese 244 00:12:14,520 --> 00:12:18,040 Speaker 1: economy is very insular and continues to recover at a 245 00:12:18,120 --> 00:12:21,000 Speaker 1: pace very different than the rest of the global economy, 246 00:12:21,240 --> 00:12:23,559 Speaker 1: and the event that that does occur, that could create 247 00:12:23,600 --> 00:12:28,599 Speaker 1: a situation where the Chinese Central Bank provides less accommodation 248 00:12:28,840 --> 00:12:31,200 Speaker 1: and you actually see rates rides and inflation pick up 249 00:12:31,280 --> 00:12:34,120 Speaker 1: in China. That's a that's a real risk. The other 250 00:12:34,240 --> 00:12:37,080 Speaker 1: risk is that um from a credit standpoint, people get 251 00:12:37,080 --> 00:12:39,360 Speaker 1: concerned again about China kind of the other side, and 252 00:12:39,720 --> 00:12:42,319 Speaker 1: while the central bank has the ability to lower rate, 253 00:12:42,679 --> 00:12:44,760 Speaker 1: you could have a situation where there's credit concern. I 254 00:12:44,800 --> 00:12:48,240 Speaker 1: think that's less of a concern. In the end, rates 255 00:12:48,360 --> 00:12:51,480 Speaker 1: are attractive in China. Rates are in the three and 256 00:12:51,520 --> 00:12:53,800 Speaker 1: a quarter area. They're meaningfully higher than they are on 257 00:12:53,840 --> 00:12:55,840 Speaker 1: the rest of the globe. We don't expect to see 258 00:12:55,840 --> 00:12:58,760 Speaker 1: inflation running away in China, and so the real rate 259 00:12:59,040 --> 00:13:02,440 Speaker 1: in a country like is actually somewhat attractive. I'm not 260 00:13:02,520 --> 00:13:04,720 Speaker 1: overly concerned. That doesn't feel like a crowd of trade. 261 00:13:04,760 --> 00:13:06,959 Speaker 1: Aren't a lot of investors that have the ability to 262 00:13:07,000 --> 00:13:09,680 Speaker 1: be able to invest in China debt that you're that 263 00:13:09,760 --> 00:13:11,520 Speaker 1: you're overly concerned that it can be one of these 264 00:13:11,559 --> 00:13:15,520 Speaker 1: crowd of trade. But obviously, Mike Well, I got a question. 265 00:13:15,600 --> 00:13:19,040 Speaker 1: You were a ginormous basketball player at Brandeis. Did you 266 00:13:19,120 --> 00:13:22,280 Speaker 1: really cut practice once because you wanted to go see 267 00:13:22,320 --> 00:13:26,320 Speaker 1: Al Gore? Did you really do that? Oh my god, 268 00:13:26,360 --> 00:13:33,160 Speaker 1: you really did? Um nineteen eight the eight election, and uh, 269 00:13:33,240 --> 00:13:36,400 Speaker 1: actually it was true. I actually worked on one of 270 00:13:36,400 --> 00:13:39,560 Speaker 1: the presidents of campaigns and was very active and involved. 271 00:13:39,559 --> 00:13:42,600 Speaker 1: There were about eight Democratic candidates at the time, and um, 272 00:13:42,640 --> 00:13:44,400 Speaker 1: I actually did go to the coach, and the coach 273 00:13:44,480 --> 00:13:46,719 Speaker 1: getting rolled his eyes and said, we don't do that here, 274 00:13:46,720 --> 00:13:49,040 Speaker 1: We're here for basketball, and coach, no, I want to 275 00:13:49,040 --> 00:13:50,719 Speaker 1: see I want to be out Gore. I want to 276 00:13:50,720 --> 00:13:53,960 Speaker 1: hear about that new Green Deal thirty five years ago. 277 00:13:54,320 --> 00:13:56,640 Speaker 1: Green Deal, it was really a thing, and so actually 278 00:13:56,679 --> 00:14:00,079 Speaker 1: it is. And John Farrell I would say that. And 279 00:14:00,240 --> 00:14:02,640 Speaker 1: ice basketball back then was the real deal. What are 280 00:14:02,640 --> 00:14:05,080 Speaker 1: they doing final four? No, but it was a real deal, 281 00:14:05,280 --> 00:14:08,120 Speaker 1: very competitive program. I would I would love to know 282 00:14:08,160 --> 00:14:10,800 Speaker 1: what David Solomon would have to say if Greg if 283 00:14:10,800 --> 00:14:12,640 Speaker 1: Mike gave him a quick cold and said I want 284 00:14:12,640 --> 00:14:14,560 Speaker 1: to go to see a I say and talk about 285 00:14:14,600 --> 00:14:18,080 Speaker 1: the great deal, you might not say that. I'm worried 286 00:14:22,360 --> 00:14:29,000 Speaker 1: coming sex. Thank you, thank you very much. Right now 287 00:14:29,040 --> 00:14:31,560 Speaker 1: to get things started, Gregory Peters joins us. He's with 288 00:14:31,640 --> 00:14:36,320 Speaker 1: p JAM with real portfolio management, Money at Risk, FIST 289 00:14:36,440 --> 00:14:39,480 Speaker 1: income ahead of multisector and strategy and he's one of 290 00:14:39,680 --> 00:14:42,480 Speaker 1: Trophy set of awards over the years and and all 291 00:14:42,520 --> 00:14:46,520 Speaker 1: that as well. Greg, I love, love, love what you say. 292 00:14:46,520 --> 00:14:51,360 Speaker 1: This is a market assisting bondholders and not stockholders. What 293 00:14:51,400 --> 00:14:53,920 Speaker 1: do you mean by that that policy and all of 294 00:14:54,000 --> 00:14:58,760 Speaker 1: finance and capitalisms working for bond holders right now. Yeah. 295 00:14:58,800 --> 00:15:01,320 Speaker 1: So I think we're in this environment still and we're 296 00:15:01,320 --> 00:15:04,520 Speaker 1: talking about the path of the virus and rolling shutdowns 297 00:15:04,520 --> 00:15:07,480 Speaker 1: and pullbacks and fiscal similus. I think what that really 298 00:15:07,560 --> 00:15:12,880 Speaker 1: does at its core, it's really keep companies conservative, right, 299 00:15:12,920 --> 00:15:17,240 Speaker 1: and being conservative benefits bond holders over equity holders. And 300 00:15:17,280 --> 00:15:20,720 Speaker 1: so what you're continuing to see our companies worried about 301 00:15:20,760 --> 00:15:24,120 Speaker 1: the path of the virus rightfully, so uh and so 302 00:15:24,240 --> 00:15:28,280 Speaker 1: they're retrenching, uh and and and so you're not going 303 00:15:28,320 --> 00:15:32,440 Speaker 1: to see the same type of activity where bond holders 304 00:15:32,480 --> 00:15:35,880 Speaker 1: are put to the side, uh and equity holders are 305 00:15:35,920 --> 00:15:39,400 Speaker 1: put forward. So I think that's the environment that we're in. 306 00:15:40,560 --> 00:15:45,520 Speaker 1: I know it's perverse, but that's bond market investing. We've 307 00:15:45,520 --> 00:15:48,800 Speaker 1: seen some huge bond issuance, some huge bond supply through 308 00:15:49,680 --> 00:15:52,400 Speaker 1: through this pandemic from both investments gride and high. Can 309 00:15:52,440 --> 00:15:54,960 Speaker 1: you do a distinction on what that money is being 310 00:15:55,040 --> 00:15:57,520 Speaker 1: used for this time around and whether that plays into 311 00:15:57,520 --> 00:16:01,720 Speaker 1: the argument you're making. That absolutely plays into the argument. 312 00:16:01,800 --> 00:16:05,040 Speaker 1: So at the surface level, you see the headlines of 313 00:16:05,080 --> 00:16:08,160 Speaker 1: all these issuance it's it's somewhat scared. But then when 314 00:16:08,200 --> 00:16:10,880 Speaker 1: you look a little deeper, what you see or that 315 00:16:10,960 --> 00:16:15,080 Speaker 1: companies are actually terming out their existing debt at lower 316 00:16:15,120 --> 00:16:19,280 Speaker 1: coupons and paying down their higher coupon short debt. So 317 00:16:19,560 --> 00:16:21,840 Speaker 1: in effect, what they're doing is that they're putting their 318 00:16:21,880 --> 00:16:25,160 Speaker 1: balances in better shape, not worse shape. At the same 319 00:16:25,200 --> 00:16:29,520 Speaker 1: time they are preparing for additional liquidity measures. And so 320 00:16:29,600 --> 00:16:33,000 Speaker 1: those two things put together, I think put bond holders 321 00:16:33,040 --> 00:16:35,360 Speaker 1: in a better place, not a worth place. So it's 322 00:16:35,400 --> 00:16:38,600 Speaker 1: really what you're using the proceeds for. It's not like 323 00:16:38,640 --> 00:16:40,960 Speaker 1: you're using the proceeds like you have in the past 324 00:16:41,040 --> 00:16:44,040 Speaker 1: to buy back equity, right, So you're not doing that, 325 00:16:44,080 --> 00:16:48,080 Speaker 1: and I think that intent and that purpose really benefits 326 00:16:48,280 --> 00:16:50,600 Speaker 1: being a bond holder in here. Greg the credit market 327 00:16:50,760 --> 00:16:54,640 Speaker 1: not a monolith. You've got investment grade corporate issuers perhaps 328 00:16:54,640 --> 00:16:57,320 Speaker 1: doing what you say. On the high yield side, I've 329 00:16:57,360 --> 00:17:00,000 Speaker 1: read an increasing number of articles about pick toggle deals. 330 00:17:00,080 --> 00:17:02,040 Speaker 1: Basically if they don't want to pay their interests, they 331 00:17:02,080 --> 00:17:04,320 Speaker 1: just put it on their debt balance. You see also 332 00:17:04,400 --> 00:17:08,680 Speaker 1: recap divida a dividend recapitalizations. Basically private equity firms having 333 00:17:08,680 --> 00:17:12,080 Speaker 1: their portfolio companies borrow more money to give them a payout. 334 00:17:12,280 --> 00:17:16,920 Speaker 1: How does this fit into the conservativeness that you're talking about. Yeah, 335 00:17:16,920 --> 00:17:19,080 Speaker 1: so I think you're always going to see that type 336 00:17:19,200 --> 00:17:22,240 Speaker 1: of transaction, but it's not really happening in Moss. And 337 00:17:22,280 --> 00:17:24,679 Speaker 1: so you can always pick to a certain deal that 338 00:17:24,760 --> 00:17:28,159 Speaker 1: happened that's maybe pushing the limits, but it doesn't really 339 00:17:28,160 --> 00:17:31,760 Speaker 1: tell you the broader story. And the broader story is 340 00:17:31,920 --> 00:17:34,320 Speaker 1: the one that I just described, So I think that's 341 00:17:34,359 --> 00:17:37,800 Speaker 1: the important piece of the puzzle. Don't don't get drawn 342 00:17:37,840 --> 00:17:41,480 Speaker 1: in by these idiosyncratic kind of news stories. The broader 343 00:17:41,520 --> 00:17:44,640 Speaker 1: story is want of balance sheet repair, and I think 344 00:17:44,840 --> 00:17:48,960 Speaker 1: that's the driver. Let's push the politics through this conversation 345 00:17:48,960 --> 00:17:52,040 Speaker 1: as well, correct going forward sector to sector, what you're 346 00:17:52,040 --> 00:17:54,439 Speaker 1: looking at the moment and the kind of permitations that 347 00:17:54,520 --> 00:17:56,640 Speaker 1: you guys are talking about A page Jim. As far 348 00:17:56,640 --> 00:18:00,760 Speaker 1: as the election is concerned, Yeah, so the action obviously 349 00:18:01,240 --> 00:18:04,160 Speaker 1: is that the four Really it boils down to what's 350 00:18:04,240 --> 00:18:08,800 Speaker 1: the new regulatory construct and the tax construct? Um uh 351 00:18:08,880 --> 00:18:11,840 Speaker 1: and so look, I mean I would I think it's 352 00:18:11,880 --> 00:18:15,760 Speaker 1: a still worthy of kind of examination, But I just 353 00:18:15,800 --> 00:18:18,480 Speaker 1: say a couple of things. Uh. First, and foremost is 354 00:18:18,520 --> 00:18:20,560 Speaker 1: that I do think if you do have this kind 355 00:18:20,560 --> 00:18:24,040 Speaker 1: of blue suite that seems to have really uh captivated 356 00:18:24,040 --> 00:18:27,720 Speaker 1: the market in here, that does benefit the consumer as 357 00:18:27,760 --> 00:18:31,320 Speaker 1: it could kind of fuel continued kind of wage growth 358 00:18:31,320 --> 00:18:34,960 Speaker 1: and just economic growth. Um. But but the one area 359 00:18:35,000 --> 00:18:37,200 Speaker 1: that we see differently than maybe the equity market in 360 00:18:37,280 --> 00:18:41,840 Speaker 1: some other areas um is the financials. Uh So, to me, 361 00:18:42,080 --> 00:18:45,120 Speaker 1: it's really hard to see a situation where there could 362 00:18:45,160 --> 00:18:48,920 Speaker 1: be much more regulation to damage kind of the ability 363 00:18:48,960 --> 00:18:52,159 Speaker 1: for financials to operate. So so my comment has been 364 00:18:52,200 --> 00:18:54,879 Speaker 1: it's hard to kill the patient twice, and so I 365 00:18:54,880 --> 00:18:59,040 Speaker 1: think it's really a pretty benign environment all else equal, 366 00:18:59,320 --> 00:19:01,760 Speaker 1: if there is a leadership change on the financial side. 367 00:19:01,960 --> 00:19:05,760 Speaker 1: And then finally on the energy front, this is highly controversial. 368 00:19:06,119 --> 00:19:08,720 Speaker 1: Many investors are looking at energy. Obviously it was a 369 00:19:08,760 --> 00:19:11,720 Speaker 1: center at the last debate, but the truth in the 370 00:19:11,800 --> 00:19:15,160 Speaker 1: matter of the energy companies haven't really benefited either equity 371 00:19:15,200 --> 00:19:18,960 Speaker 1: holders or bond holders over the past several years. So 372 00:19:19,280 --> 00:19:22,000 Speaker 1: some kind of change in alteration in the spending mix 373 00:19:22,000 --> 00:19:25,680 Speaker 1: and maybe being less profligate is isn't such a bad thing. 374 00:19:25,800 --> 00:19:30,359 Speaker 1: So I'm actually pretty excited over the alpha opportunities within 375 00:19:30,440 --> 00:19:35,159 Speaker 1: the energy space going forward, Greg, the great understanding is 376 00:19:35,200 --> 00:19:37,840 Speaker 1: it bonds as a hedge don't work anymore, so I 377 00:19:37,840 --> 00:19:41,280 Speaker 1: gotta go find something else, whether it's preferred bank prefers, etcetera, 378 00:19:41,680 --> 00:19:45,920 Speaker 1: or forty seven other intangible assets as well. Is that 379 00:19:46,320 --> 00:19:48,600 Speaker 1: gonna happen? I mean, a bond is a bond if 380 00:19:48,600 --> 00:19:50,880 Speaker 1: fixed income as a hedge is is just what it is, 381 00:19:51,160 --> 00:19:54,520 Speaker 1: a predictable stream of of cash flows. Can there be 382 00:19:54,720 --> 00:19:59,200 Speaker 1: an alternative? I think there can, but it's way too early. 383 00:19:59,320 --> 00:20:02,320 Speaker 1: So I agree with with Mike Swell who was on previously. 384 00:20:02,480 --> 00:20:05,320 Speaker 1: I think it's way too early to call the death 385 00:20:05,359 --> 00:20:07,720 Speaker 1: of the bond market. But this is really picking up 386 00:20:07,720 --> 00:20:10,840 Speaker 1: steam as a story. But it you know, I mean, 387 00:20:10,880 --> 00:20:15,440 Speaker 1: we're in an environment where real yields are negative, right, 388 00:20:15,480 --> 00:20:19,000 Speaker 1: so the fact that you're getting you know, seventy fifty 389 00:20:19,040 --> 00:20:21,080 Speaker 1: basis points depending on where you are in the curve, 390 00:20:21,160 --> 00:20:23,440 Speaker 1: that matters a lot relative to that. So I still 391 00:20:23,480 --> 00:20:26,960 Speaker 1: think bonds add a lot of value to the portfolil uh. 392 00:20:27,000 --> 00:20:30,760 Speaker 1: And there's a thing called risk adjustment, So you are, um, 393 00:20:30,800 --> 00:20:33,240 Speaker 1: you know, getting a return for a lot less risk, 394 00:20:33,280 --> 00:20:36,560 Speaker 1: and I think that matters. So there's this big storyline 395 00:20:36,600 --> 00:20:38,960 Speaker 1: going on around the death of the bond market, and 396 00:20:39,040 --> 00:20:42,040 Speaker 1: sixty forty is dead. I think it's way too early 397 00:20:42,119 --> 00:20:45,919 Speaker 1: for that. Uh. And bonds do what they're supposed to do. 398 00:20:46,080 --> 00:20:49,760 Speaker 1: You see it today, UH, and I'll believe you know, 399 00:20:49,840 --> 00:20:52,800 Speaker 1: you'll continue to see it. So UH. I'm so bullish 400 00:20:53,040 --> 00:20:55,800 Speaker 1: on the outlook for bonds. And in fact, I mean 401 00:20:55,840 --> 00:20:57,840 Speaker 1: I think it's going to be somewhat vaulatile here over 402 00:20:57,880 --> 00:21:01,880 Speaker 1: the near term within a confined range. But I think 403 00:21:01,880 --> 00:21:05,520 Speaker 1: that back in the curve has actually value here. UH. 404 00:21:05,520 --> 00:21:08,600 Speaker 1: And so we're actually pretty constructive on the level of 405 00:21:08,680 --> 00:21:14,520 Speaker 1: yields UH. In the US bond markets, bond specialists, bonds 406 00:21:14,600 --> 00:21:17,399 Speaker 1: on Iva, Greg Fadist, Jim try to catch up what 407 00:21:17,480 --> 00:21:22,320 Speaker 1: he said as the wise thank you right now. It 408 00:21:22,440 --> 00:21:24,320 Speaker 1: is a great joy if you go to a fancy 409 00:21:24,320 --> 00:21:27,080 Speaker 1: school like Harvard and you get a bunch of fancy degrees. 410 00:21:27,560 --> 00:21:30,560 Speaker 1: If you are ever so lucky, you get to go 411 00:21:30,720 --> 00:21:33,359 Speaker 1: to the founding school. That would be William and Mary 412 00:21:33,480 --> 00:21:37,280 Speaker 1: and their Law school of seventeen seventy nine. It was 413 00:21:37,320 --> 00:21:40,960 Speaker 1: an historic moment for the nation when a number of people, 414 00:21:41,000 --> 00:21:44,480 Speaker 1: including Mr Jefferson, got together and said we have to 415 00:21:44,520 --> 00:21:47,359 Speaker 1: be different, and they did that at william and Mary. 416 00:21:47,400 --> 00:21:50,919 Speaker 1: Rebecca Green is at Williams Mary. She is the winner 417 00:21:51,080 --> 00:21:55,720 Speaker 1: of their Acclaim Teaching Award given by graduate students, and 418 00:21:55,800 --> 00:21:58,520 Speaker 1: that is a good and wonderful thing. Professor Green, thank 419 00:21:58,560 --> 00:22:02,480 Speaker 1: you so much for joining us on election transparency. Can 420 00:22:02,480 --> 00:22:06,880 Speaker 1: our radio listeners are television listeners? Can they be confident 421 00:22:07,280 --> 00:22:12,880 Speaker 1: of safety at the voting booth on November three? Um? Well, 422 00:22:12,880 --> 00:22:15,399 Speaker 1: first all, thank you for having me, um, And the 423 00:22:15,400 --> 00:22:19,520 Speaker 1: second of all, absolutely they can. Um. Election officials and 424 00:22:19,800 --> 00:22:22,560 Speaker 1: local governments have been working hard to ensure that we 425 00:22:22,680 --> 00:22:25,879 Speaker 1: have a safe and secure election. There have been so 426 00:22:25,920 --> 00:22:28,280 Speaker 1: many elections going back to the founding of a Wilamen 427 00:22:28,320 --> 00:22:31,920 Speaker 1: Mary eight particularly eighteen twenty four and then on to 428 00:22:32,040 --> 00:22:35,640 Speaker 1: two thousand twenty that are this fractious. Is it normal 429 00:22:35,760 --> 00:22:39,760 Speaker 1: to be this angry where there's so much tension about 430 00:22:39,840 --> 00:22:44,480 Speaker 1: our voting process? Um, you know, I would not say 431 00:22:44,600 --> 00:22:47,159 Speaker 1: it's normal. We certainly do have a long history of 432 00:22:47,400 --> 00:22:50,840 Speaker 1: problems at the polls, but um, it is, um the 433 00:22:50,920 --> 00:22:53,800 Speaker 1: case I think that we're in, you know, a hyperpartisan 434 00:22:54,080 --> 00:22:58,919 Speaker 1: mood and you know we uh, you know, we we 435 00:22:59,040 --> 00:23:04,040 Speaker 1: certainly haven't seen anything um like UM. You know, regular 436 00:23:04,119 --> 00:23:07,720 Speaker 1: comments emanating from the White House that there's a problem 437 00:23:07,840 --> 00:23:11,159 Speaker 1: with our election administration. So so it certainly is a 438 00:23:11,160 --> 00:23:14,480 Speaker 1: different tone than any previous election, at least in the 439 00:23:14,480 --> 00:23:17,720 Speaker 1: modern era. Rebecca, there's a question about November three, it 440 00:23:17,760 --> 00:23:20,120 Speaker 1: will be the last day of voting, and then there's 441 00:23:20,119 --> 00:23:23,000 Speaker 1: a question about the weeks after that, as both sides 442 00:23:23,040 --> 00:23:26,680 Speaker 1: of this campaign get their cavalry together to fight the 443 00:23:26,800 --> 00:23:30,879 Speaker 1: legal foundations of this vote. What are some of the 444 00:23:31,880 --> 00:23:35,359 Speaker 1: battles that you're expecting to see in the court based 445 00:23:35,400 --> 00:23:39,080 Speaker 1: on both President Trump and former Vice President Biden's comments 446 00:23:39,080 --> 00:23:43,520 Speaker 1: so far. Yeah, well, so, I think the first thing 447 00:23:43,560 --> 00:23:46,840 Speaker 1: to say is that post election litigation is normal. It's 448 00:23:46,880 --> 00:23:49,800 Speaker 1: part of our system. It's how we resolve disputes, and 449 00:23:50,240 --> 00:23:53,080 Speaker 1: this country has a long history of resolving post election 450 00:23:53,200 --> 00:23:57,160 Speaker 1: disputes in the courts. Um. You know, post election disputes 451 00:23:57,160 --> 00:23:59,840 Speaker 1: are generally guided by state law, so you know it's 452 00:24:00,040 --> 00:24:02,880 Speaker 1: for in in every state. How this will all unfold 453 00:24:03,080 --> 00:24:06,440 Speaker 1: if it if it unfolds, Um, And you know there's 454 00:24:06,560 --> 00:24:10,280 Speaker 1: there's um kind of three different Well, there's there's different 455 00:24:10,359 --> 00:24:14,960 Speaker 1: kinds of you know, there's different types of post election litigation. So, um, 456 00:24:15,080 --> 00:24:17,680 Speaker 1: you know, everyone is probably familiar with recounts when when 457 00:24:17,840 --> 00:24:20,400 Speaker 1: you know, elections are closed, candidates can call for recounts, 458 00:24:20,400 --> 00:24:23,239 Speaker 1: and again that process is governed by state law. UM. 459 00:24:23,240 --> 00:24:26,080 Speaker 1: And then there are ways that candidates and campaigns can 460 00:24:26,160 --> 00:24:30,080 Speaker 1: challenge um either you know, ballots or they can allege 461 00:24:30,400 --> 00:24:33,520 Speaker 1: official misconduct. It's called different things in different states, but 462 00:24:33,560 --> 00:24:37,399 Speaker 1: it's generally a contest or a protest or the words 463 00:24:37,400 --> 00:24:40,480 Speaker 1: that are most often used. And so those are the 464 00:24:40,560 --> 00:24:44,719 Speaker 1: various vehicles by which you can you know, challenge or um, 465 00:24:44,760 --> 00:24:47,760 Speaker 1: you know, litigate an election result. And so we can 466 00:24:47,880 --> 00:24:49,919 Speaker 1: we can expect, if it's close, we can expect to 467 00:24:49,960 --> 00:24:54,000 Speaker 1: see um, you know one are both unfold. So there's 468 00:24:54,000 --> 00:24:56,760 Speaker 1: a high likelihood that Amy Coney Barrett will get confirmed 469 00:24:56,800 --> 00:24:59,600 Speaker 1: to the Supreme Court as soon as this evening, if 470 00:24:59,600 --> 00:25:03,280 Speaker 1: she does passes through the SETI today. What's your expectation 471 00:25:03,400 --> 00:25:06,440 Speaker 1: about a potential case that would come between the Supreme 472 00:25:06,480 --> 00:25:11,080 Speaker 1: Court the way we saw back in two thousands, Well, 473 00:25:11,119 --> 00:25:14,200 Speaker 1: you know, I think it's pretty unlikely that we see 474 00:25:15,359 --> 00:25:18,359 Speaker 1: a two thousand like um, you know event. I mean, 475 00:25:18,359 --> 00:25:20,520 Speaker 1: there would have to be a lot of circumstances that 476 00:25:20,560 --> 00:25:23,680 Speaker 1: would coincide for that to come about. I mean, it's 477 00:25:23,680 --> 00:25:26,080 Speaker 1: pretty extraordinary that the whole waste came down to Florida 478 00:25:26,160 --> 00:25:28,640 Speaker 1: and that the you know, the race in Florida was 479 00:25:28,640 --> 00:25:32,400 Speaker 1: was five and thirty seven votes, Um, you know spread. 480 00:25:32,480 --> 00:25:36,159 Speaker 1: So I think, you know, the chances of lightning striking 481 00:25:36,200 --> 00:25:39,280 Speaker 1: again seem pretty remote to me. Um. I think what's 482 00:25:39,280 --> 00:25:42,040 Speaker 1: more likely is a case could end up at the 483 00:25:42,080 --> 00:25:46,440 Speaker 1: Supreme Court that you know, deals with the fundamental powers 484 00:25:46,480 --> 00:25:50,320 Speaker 1: of state legislatures versus state courts. That's a that's a 485 00:25:50,560 --> 00:25:52,760 Speaker 1: kind of we've already seen a premonition of that with 486 00:25:52,840 --> 00:25:55,800 Speaker 1: a four or four split last week on that question, UM, 487 00:25:55,840 --> 00:25:58,400 Speaker 1: and that that could re emerge as you know, there's 488 00:25:58,400 --> 00:26:03,200 Speaker 1: some unsettled questions about um, you know, authority in uh 489 00:26:03,240 --> 00:26:08,399 Speaker 1: in elections in states. Rebecca Green, Brian Rosenthal, and Michael 490 00:26:08,480 --> 00:26:11,720 Speaker 1: Rothfeldt in the New York Times this morning have an 491 00:26:11,760 --> 00:26:16,720 Speaker 1: absolutely brilliant article on the nepotism involved in this case. 492 00:26:16,760 --> 00:26:18,560 Speaker 1: It happens to be, I believe the City of New 493 00:26:18,640 --> 00:26:22,560 Speaker 1: York election process and all that, how are we going 494 00:26:22,600 --> 00:26:25,040 Speaker 1: to vote five or ten years? So, now do you have, 495 00:26:25,480 --> 00:26:28,960 Speaker 1: in your expert view, a better way we're going to 496 00:26:29,119 --> 00:26:33,320 Speaker 1: vote than the nepotism and the local, local, local politics 497 00:26:33,359 --> 00:26:37,560 Speaker 1: of this nation's electoral process. Yeah, you know, it's pretty 498 00:26:37,600 --> 00:26:42,000 Speaker 1: extraordinary when when we have foreign visitors come and look 499 00:26:42,000 --> 00:26:45,199 Speaker 1: at our our election system, they're often amazed that we 500 00:26:45,320 --> 00:26:48,719 Speaker 1: have this very decentralized and sort of partisan based election 501 00:26:48,720 --> 00:26:52,760 Speaker 1: and meditation in this country. And it is many volumes 502 00:26:52,760 --> 00:26:55,720 Speaker 1: have been written about how problematic, um it is for 503 00:26:55,840 --> 00:26:58,959 Speaker 1: a lot of reasons. But on the other hand, you know, 504 00:26:59,440 --> 00:27:02,320 Speaker 1: if you look two thousand sixteen and hopefully in two 505 00:27:02,320 --> 00:27:05,360 Speaker 1: thousand twenty, one of the features of our system being 506 00:27:05,440 --> 00:27:08,880 Speaker 1: so decentralized is that it's very hard to do anything 507 00:27:09,320 --> 00:27:12,959 Speaker 1: to hermit from the outside, right because, um, you have 508 00:27:13,000 --> 00:27:16,000 Speaker 1: to there's essentially ten thousand different elections in this country, 509 00:27:16,080 --> 00:27:18,159 Speaker 1: and so that that kind of provides some protection in 510 00:27:18,280 --> 00:27:21,600 Speaker 1: terms of the kinds of potential harms that we see. So, um, 511 00:27:21,640 --> 00:27:23,399 Speaker 1: it's sort of a two sided coin in terms of 512 00:27:23,520 --> 00:27:26,080 Speaker 1: reform and like what we might you know, what changes 513 00:27:26,160 --> 00:27:28,360 Speaker 1: we might have. Um, you know, ten years from now, 514 00:27:28,760 --> 00:27:33,000 Speaker 1: you could imagine, after this insane election season, that Congress 515 00:27:33,240 --> 00:27:35,440 Speaker 1: decides to take a little bit more of a heavy 516 00:27:35,520 --> 00:27:39,200 Speaker 1: hand in terms of mandating some certain basics in terms 517 00:27:39,200 --> 00:27:41,440 Speaker 1: of how we how we run our elections. This is 518 00:27:41,440 --> 00:27:44,000 Speaker 1: about a joy Rebecca Green, Thank you so much, Professor 519 00:27:44,040 --> 00:27:47,760 Speaker 1: Green at the Law School of the College of William 520 00:27:48,280 --> 00:27:52,440 Speaker 1: H and Mary. Thanks for listening to the Bloomberg Surveillance podcast. 521 00:27:52,800 --> 00:27:57,840 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 522 00:27:57,880 --> 00:28:02,200 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 523 00:28:02,320 --> 00:28:06,119 Speaker 1: Keane before the podcast. You can always catch us worldwide. 524 00:28:06,640 --> 00:28:07,720 Speaker 1: I'm Bloomberg Radio.